South Korea is tightening the regulatory reins on its native crypto exchanges. Effective September, exchanges within the country must maintain a minimum reserve of 3 billion won ($2.3 million). This move comes as South Korea seeks to fortify consumer protection in the crypto domain.

Elevated Financial Cushion For Consumer Protection

This policy may ensure exchanges can handle unforeseen financial duress or other liabilities. This approach by the South Korean authorities suggests an anticipation of the sector’s growth, coupled with the responsibility of safeguarding consumer interests.

In the crypto space, user trust and security are paramount. With the looming deadline, major exchanges such as Upbit and Bithumb are reportedly preparing to meet the stipulated requirements. This development comes after guidelines released in July by the Korea Federation of Banks, as highlighted by local media outlet News1.

Titled “Virtual Asset Real-Name Account Operation Guidelines,” these guidelines emphasize the need for exchanges to allocate either 3 billion won or 30% of their daily average deposits in reserves.

This strategic reserve ensures exchanges can sufficiently “fulfill their liability for damages to users” if unforeseen risks or liabilities materialize. However, the guidelines also dictate that these reserve funds shall not exceed a ceiling of 20 billion won.

South Kor
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Author: Samuel Edyme

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